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London Forex Report: Poloz Whipsaws Loonie In Late Trading

London Forex Report: Poloz Whipsaws Loonie In Late Trading

London Forex Report: All preliminary Markit PMI readings exceeded expectations. Markit PMI manufacturing climbed to a one-year high of 53.2 in the US while that of the Eurozone settled at a 2.5-year high of 53.3 in October, bolstering expectations of improving factory activities going into 4Q 2016. USD climbed against 50% of G10FX on favourable US data that continued to support Fed rate hike expectations. The USD Index was rejected twice from its top but nonetheless managed to close 0.06% higher at 98.75.

FX Majors: EUR Two separate reports from Markit showed that both manufacturing and services sectors in the Eurozone gathered steam in October. Manufacturing PMI surged to 53.3 in October (September: 52.6), the highest reading since April 2014, indicating a pick- up in factory activities heading into the final quarter of the year. On the other hand, services sector was expanding at a quicker pace. PMI came in at 53.5 in October after a reading of 52.2 in September. GBP total order trends as measured by UK CBI showed orders staged a surprised deterioration in October, weighed down by weaker domestic demand in the face of Brexit concerns. JPY Final reading of Japan’s leading index came in at 100.9 in August (July: 100.0), according to the Cabinet office in Tokyo. The print was the highest in nine months, signaling that households were optimistic about the outlook of the economy despite the gradual pick up in current economic conditions. In a second release by the Cabinet office, the gauge of current activities was little changed in August (112.0 vs July: 112.1).

Technical: Bears seek the next downside objective sited at 1.0845 after falling 10 pips short Friday, below here opens 1.08. Near term resistance is sited at 1.0930/50, medium term resistance is sited at 1.1030 only over 1.1230 eases bearish bias.Retail Sentiment: BullishTrading Take-away: Short

Technical: As 1.2250 rejects near term corrective advances bears target a retest of 1.2134 ahead of pivotal 1.20. Medium term resistance is sited at 1.2330. Only a close over 1.25 eases bearish pressure.Retail Sentiment: BullishTrading Take-away: Short

Technical: Bullish attention on the upside equidistant swing corrective objective at 104.86 near term support is at 103.30 only a close below 102.80 eases bullish pressure.Retail Sentiment: BearishTrading Take-away: Long

Technical: 113.30 under pressure breach here opens channel resistance at 113.95 as this caps near term corrections bears target 1.12 only a close over 114.30 eases bearish pressure.

Retail Sentiment: BearishTrading Take-away: Sidelines

Commodities FX: GOLD firmed as the dollar retreated from an earlier near nine-month high, though uncertainty over the timing of a Fed rate hike kept prices hemmed in a range. OIL held lower on Monday. Iraq indicated it would not comply with OPEC production cuts because of ongoing conflict with Islamic forces and it said it is producing more than OPEC has indicated. Recall OPEC announced plans last month to cut output to boost prices, but has not yet given details on how it will reach the target. The group will iron out the details of how it will hit the target at its next meeting in Vienna on 30 November. AUD Monthly CPI estimates from the Melbourne Institute suggest that the official quarterly Australian Q3 CPI data may be biased to disappoint market estimates to the downside. CAD is increasingly sensitive to monetary developments Overnight, USDCAD fell to 1.3283 after Bank of Canada Govenor Poloz said that their best plan right now was to “wait for the next 18 months or so. Loonie has since rallied back after Poloz made it clear that he was not referring to monetary policy but to the time frame over which the output gap is expected to close.

Technical: Sharp rejection from pivotal 7730 sees test of bids sub .7600, near term resistance is sited at .7660 as this area caps corrections .7530 becomes the next downside objective . A close over .7730 reverses bearish bias and focus shifts to .7830.Retail Sentiment: NeutralTrading Take-away: Neutral

Patrick has been trading for the past ten years. After liquidating several accounts in his early days he stopped ‘gambling’ and applied himself as a student of risk. Self taught and more self aware thanks to Mr Market. Patrick applies simple technical strategies based around market price and time structure to identify high probability trade locations.